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IPFS News Link • Business/ Commerce

Man Who Cleaned Up Enron and Is FTX's New CEO Explains to Court Why FTX...

• https://www.vice.com, By Jason Koebler

"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here ... this situation is unprecedented."

John J. Ray III has 40 years' experience restructuring distressed companies, most famously when he helped wind down Enron, one of the most famous cases of corporate malfeasance of all time. Now, he has been brought in as the new CEO of FTX, Sam Bankman-Fried's imploding cryptocurrency exchange. And, in a filing Thursday, he told a bankruptcy court that he has never in his entire life seen anything this bad.

The entire 30-page declaration is worth reading simply because it is an astounding, scathing document that describes incredible levels of disorganization and chaos at a company that now owes more than a million people a total of several billion dollars: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," he begins his statement, noting that he cleaned up Enron's mess as well as many others in his 40-year career. "From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented." 

It does not get better from there. In his reserved and understated way, Ray isn't so much describing the failures of a company as the absence of a company. Everything from how many people worked for the company to the basic records that would allow one to reconstruct that appears to be a black hole. Where all the money went is a question, he suggests, that may not be answerable at all.